ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Public Accountants

To K N Energy, Inc.:

     We have audited the accompanying consolidated balance sheets
of K N Energy, Inc. (a Kansas corporation) and subsidiaries as of
December 31, 1993 and 1992, and the related consolidated statements
of income, common stockholders' equity and cash flows for each of
the three years in the period ended December 31, 1993.  These
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of K N Energy, Inc. and subsidiaries as of December 31,
1993 and 1992, and the results of their operations and their cash
flows for each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting principles.

     As explained in Notes 1(D) and 9 of Notes to Consolidated
Financial Statements, the Company changed its method of accounting
for income taxes effective January 1, 1992, and its method of
accounting for postretirement benefits other than pensions
effective January 1, 1993. 

     Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole.  The schedules
listed in the index of financial statements are presented for
purposes of complying with the Securities and Exchange Commission's
rules and are not part of the basic financial statements.  These
schedules have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion,
fairly state in all material respects the financial data required
to be set forth therein in relation to the basic financial
statements taken as a whole.

                                        /s/ Arthur Andersen & Co.

Denver, Colorado,
   February 10, 1994.